All right. Good morning, everyone. So we're going to kick things off here. Our first presenter is Coeur Mining. Coeur is a diversified precious metals producer with operations in the United States and Mexico, and recently closed the acquisition of SilverCrest Metals, adding the Las Chispas mine in Mexico. And we are joined today by CEO Mitch Krebs.
Thanks. Good morning, everybody. Thanks for making an 8:00 A.M. presentation. That shows commitment. Just wanted to give a quick shout-out to some of the team from the company who are here, as well as Eric Fier, who is the founder and CEO of SilverCrest and now the director of the company. So he's become now one of my bosses, which is great. We're fortunate to have him on our board now. So Eric, welcome, and thank you. I know it's 8:00 A.M., but wow, what a great time to be here to give you an update and kind of unveil a bit of a new Coeur. After almost 100 years of existence, the company's finally got all the puzzle pieces in place here and is set up for a terrific year.
As Kevin said, we're a U.S.-centric, U.S.-based silver and gold mining company with five operations: three of them in the U.S., two of them in Mexico, and a development project, an exploration project up in northern British Columbia. About 60% of our revenue comes from the United States. And this year, about two-thirds of our revenue will come from gold and one-third from silver. And we just came out of what was, I think we called it on our earnings call, a consequential year. It was really a year full of milestones, a lot of accomplishments up and down the whole company at each asset. And I look forward to giving you a glimpse into all of those milestones.
But 2025 is set up now to be really the record, the best year the company's ever had since it became a company in 1928 in terms of production growth, free cash flow, and debt reduction. So a lot of catalysts lie ahead here in 2025. Kevin mentioned SilverCrest. Eric, Tara, great team there, great asset, great company. Couldn't be more excited about the combination that this creates, along with our Rochester expansion that we've been talking about for a few years every year here, which is now in the rearview mirror t hat ramp-up occurred last year. So Rochester will have a first full year post-expansion this year. That's one of the two dynamic duo driving this record 2025. The other is obviously the addition of SilverCrest and their Las Chispas asset, 10.5 months of contribution this year. We closed on Valentine's Day, Friday the 14th.
But between the two of those drivers, we're going to see silver production increase from last year about 11 million ounces to this year close to 20 million ounces. On the gold production side, that'll be up over 20% year- over- year. Las Chispas, this is only its third year as an operation here in 2025. It's an extremely high-quality asset, a huge addition and upgrade to our overall asset quality and portfolio. And between the two, and then along with our three other mines, this year we'll produce or we'll generate something like $300 million of free cash flow, $700 million or so of EBITDA. And just to give you a sense of how far we've come in a short period of time, you go back to 2023, our leverage ratio, net debt to EBITDA, was over four times in the middle of 2023.
Our EBITDA at the time was $101 million. You fast forward to 2025, EBITDA will be staring down $700 million. With $100 million or so of free cash flow a quarter, we should be getting really close to a zero times net debt to EBITDA leverage ratio by the end of the year. Huge transformation that started in the second half of last year and will continue to play out here in the full year of 2025. Just to give you a quick update on Rochester, like I said, expansion's complete. In 2025, we should see production up about 75% over last year.
So that's a reflection of the first full year after we invested $730 million in this expansion that kicked off in the middle of 2020, wrapped up in the first half of last year, and then ramped up during the second half of the year. So not only will we see the throughput increase to what should be right around 30 million tons going through this new crusher, we'll see costs come down by 25%-30%, and we'll see free cash flow of around $100 million at these prices coming out of Rochester. And we've got a good 16-year mine life ahead of us out there with plenty of room to expand and extend and enhance that mine life. You can see the reserves there on the right side of the graph. This is just an aerial view of what $730 million will get you.
The scale out there is massive. Like I said, this is over a 30 million tons a year three-stage crusher, leach pad, Merrill-Crowe. This operation used to be more like a 13 million tons a year crush operation where production was three and a half million ounces of silver a year and maybe 35,000 ounces of gold a year. So to go up this year to more like close to 8 million ounces of silver and 70,000 ounces of gold, it's a massive change that's taking place here in 2025. Now that the expansion's behind us, we can start to turn our attention more to exploration. I think this year we'll invest about $15 million. Last year we invested $10 million, and the year before that was $5 million. So we're ramping up that exploration. We're not all that interested in adding on to the 16-year mine life.
We are interested in drilling out some higher-grade opportunities that we have around the existing operation to juice the economics in the next few years and bring in some higher-grade material into the mine plant. So we're looking forward to pursuing that more aggressively here this year. Exploration, you'll hear me talk a lot about today. It's a theme across the company, not just at Rochester. Over the last few years, you can see here we've maintained a pretty high level of exploration investment. No better way to drive higher returns on invested capital than reinvesting back into our existing operations. Something like 85% of this investment over the last five years has been around our existing mines. And it's been tremendously successful. I'll get to that in a minute. But just over on the right, you can see a lot of breakdown.
The big three allocations this year of our investment in exploration are at Palmarejo, at Las Chispas, and then at Rochester that I mentioned. And if you just pull the lens back and look at over the last five years what this investment has done for the company, it's been pretty incredible. We've invested $285 million in exploration in total over the last five years. About $75 million of that has been in the infill, capitalized, converting resources into reserves. The balance has been on resource identification of new resources, expanding existing resources. And if you look at just on the reserves side, you can see there in the bottom left on a gold equivalent basis, we've gone up by a million, but we've also more than replaced what we've mined over the time.
In fact, if you look at our total material across all categories on a gold equivalent basis, it's increased something like 10 million gold equivalent ounces over the last five years. We now have 22 million gold equivalent ounces across the company. So a decade ago, this company was known for having higher costs, bad balance sheet, and short mine lives, which are kind of three strikes against any mining company. With all the things that we've done now at the company, including this exploration investment, we've really kind of knocked all three of those things on their heads and set us up for a great future. Three examples I'll go into as far as the exploration investment and successes that we're seeing. The first one is at Palmarejo. So this is in Chihuahua, right next door to Sonora.
This is somewhere that started up in 2008 with an eight-year mine life. Now here we are going into 2015. It has an eight-year mine life ahead of it. We just announced a 75% increase in the inferred resources there on that northwest, southeast trending structure where we've been mining for a while called Independencia. The big story here at Palmarejo, though, is off to the east, what's called East Palmarejo District. Over the last several years, we've kind of methodically tied up and consolidated that whole land package off to the east. And the reason that's so important is the mine area off to the left, that's called Palmarejo Main District, that's all covered by a Franco-Nevada gold stream. We sell 50% of the gold that's mined in that area to Franco-Nevada for $800 an ounce. So that hurts.
The more we can start moving off to the east, and there's plenty of opportunity. Those extensions that cross that vertical line there in the middle, we can continue mining onto that non-AOI ground. Further off there to the east, there's a lot of historic resource that we inherited from the Paramount Gold and Silver acquisition that we made like eight or nine years ago. Then just last year, we finally completed the consolidation with some Fresnillo ground that we acquired that filled in that area off to the right. The theme at Palmarejo is instead of go west, young man, it's go east. 60% of our exploration budget at Palmarejo this year will be off to the east, up from 30-something this year. That's the focus at Palmarejo.
At Kensington, this is a gold mine up in Southeast Alaska, just outside of Juneau. That mine life in 2022 was down to just over two years, and so we put in place a multi-year investment program to go after some underground development and some aggressive drilling. We ended last year with a five-year mine life, a 500,000-ounce reserve, so that gives the mine some nice operational flexibility, a little bit of runway ahead of it. Now the program there is going to turn to identifying higher-grade structures. A little bit of grade goes a long way at Kensington, and so the exploration program there now this year will start to ramp down after a few years of elevated investment, and it'll be really focused on those higher-grade sweeteners, and now we'll see Kensington, after going through this multi-year investment program, become a cash flow contributor here in 2025.
Wharf, just a couple of quick slides there. We bought Wharf in 2015 for $99 million with a five-year mine life. Fast forward to today, we've taken out now over $500 million of free cash flow from that operation. It has a six-year mine life today. We just announced some pretty big resource increases in these areas. I think M&I resources doubled, inferred resources tripled. We can see another five or ten years on top of the six years that we have out ahead of us. Wharf is going to continue printing money for us for a long, long time. In fact, last year, which was its 42nd year in operation, it had its all-time best year, 90,000 ounces of gold, $95 million of free cash flow.
In terms of return on invested capital, thinking about exploration, for $5 million or so, you can add another mine life, a year of mine life at Wharf. If it's going to get you $80 million-$90 million of free cash flow for a $5 million investment, that'll juice your return on invested capital as a company. We'll keep doing that at Wharf for a long time. Just sticking on the exploration theme for one more second, longer term up at Silvertip, really high-grade silver zinc lead system right on the border of British Columbia and Yukon. It's going to take some time to continue to drill, grow, and better understand this polymetallic carbonate replacement deposit. But we see this as a potential next development stage or next development project, next leg up for the company in terms of more silver production.
It's probably five years away from being to a point where there's a decision to make, so it's not like we're going straight from the Rochester expansion to another big capital project, we're focusing on free cash flow and on delevering, but we'll keep bringing Silvertip along, and hopefully, down the road, this will be the next project for us. I mentioned the balance sheet. The deleveraging theme is pretty pronounced to be at 1.6 times at the end of December compared to 3.4x on the leverage ratio. It's great progress, but that's really going to plummet fast here as we go through 2025 with the addition of Las Chispas with Rochester, and then when we closed on SilverCrest, they had a really pristine balance sheet, which is giving us an immediate boost to our deleveraging efforts. So thank you, Eric, for that part of SilverCrest.
Reinvesting back in the business, that's one theme that I want to make sure you take away from this. I talked about exploration. We've got probably about $150 million a year of Sustaining CapEx, which is huge steps down from where we've been over the last few years as we've gone through that Rochester expansion. We've got a few growth projects this year that need to be done throughout the portfolio, but $150 million or so of annual CapEx, along with $75 or $80 million of exploration, are two key places where we'll be reinvesting into the business using this free cash flow that we're generating after debt repayment. On the ESG front, we keep investing in that as well. We're a leader. We were the safest mining company in America last year.
We've got all the great programs to make sure that we're protecting the environment, our people, these communities, and that we're an attractive place to come work and thrive. We're a great organization, and we couldn't be prouder of who we are and what we're all about. As far as what we have on tap here, it's a pretty obvious list of to-dos. We got to really nail the Rochester first full year, the 75% increase in production, 25% decline in costs, and that strong free cash flow and delivering those metrics that I laid out. That's right at the top of the list, as well as a smooth integration of Las Chispas. I think we're off to a good start there. There was a lot of great coordination and planning between the two teams.
And thanks to our team who's here, who have done a tremendous job setting us up for success there. My only regret is that we only have 10.5 months of Las Chispas and not the full 12 months. But it's going to be a great addition to the company. And so we got to nail that, and we've got to get that balance sheet to where we want it by the end of the year, which we're well on our way to having what was a concern, the balance sheet over the last few years, to something that's a strength and probably a peer-leading balance sheet. So that's the quick update. We couldn't be more excited. I think we've created a real leading silver play with great production growth, great cash flow growth, the deleveraging theme, all these big inflection points and catalysts that are here.
Now finally, they started late last year. They're going to carry through throughout 2025, and we're set up for a lot of success. Obviously, higher prices make things a little easier and go a little faster, but it's been a lot of hard work by a lot of people to put us in a position to deliver what should be a record year here in 2025 for the company. So thanks for the time. Happy to take any questions that anybody might have.
For sure. So any questions, feel free to put them in the app, or we can get you a microphone here. But maybe I'll just kick it off. Mitch, you've been doing some work at Rochester on crush sizes to try and optimize recoveries. Can you give us an update on that and maybe any other optimizations we should look for?
Yeah, yeah. The first half of last year was really about getting up to the crushing rates that we are targeting, which is around 100,000 tons a day of material going through that new system. We achieved that by the middle of last year. Then the second part of last year was about optimizing, like you said, getting to that crush size that we want to get to of around 5/8 of an inch to optimize recoveries. I think I saw or was told the other day that 70% of the material that went through the crusher last year hit that 5/8 target. We have a little bit more optimization to do there. It really is a function of where the material comes from out of the pit.
We've been mining through some softer ore zones, which has given us a little bit of an opportunity to sort of fine-tune some of the levers and the flexibility that we have in that new system to deal with varying ore types and sort of optimize our blending and things like that. But it's great to see last year we spent a lot of time telling people that the goal there from a cost standpoint was to be at sub $2 a ton mining, $3 a ton processing, and a dollar and change per ton on G&A. And there were a lot of people who were kind of scratching their heads thinking, "I don't know if you guys can get there," but we're going to be there this year. And that is going to drive, especially at these prices, great cash flow. And so we're well on our way.
Awesome. Well, maybe kind of on that thought, you mentioned sort of the delevering with the impact of the strong cash flow you're expecting in 2025. Can you talk a bit more about plans for the balance sheet and maybe your outlook on capital allocation once you hit your delevering targets?
Yeah, yeah. We have three pieces of debt on the balance sheet. The revolver, we had about $195 million drawn on that at the end of the year. We have $290 million of 5 1/8 senior notes that aren't due till 2029. And then we have about $50 million or so of prepays that were outstanding. So we will aggressively go after that revolver and those prepays by the end of the year. Well, going into the second half of the year, that should all be cleaned up. We'll start seeing cash build up. Those 5 1/8 senior notes are a piece of paper that probably don't need to be a focus right now. They're not callable at par until next year at this time anyway.
And so after getting that revolver and those prepays paid down, it'll be all about continuing to invest in the exploration and back into the CapEx that I outlined. And then as we get into 2026, we'll let the cash build up and be in a position to where we can be opportunistic. We can look at other alternatives as far as any excess cash and returning that to shareholders. It's something that's high on the board agenda for May. And we'll start sharpening up our thinking as far as where we go with excess cash post delevering.
Great. And maybe switching over to Las Chispas, any changes or optimizations that you see there now that that's in the portfolio?
Yeah. I'm not just saying this because Eric's here, but we're just going to continue doing what they were doing because it worked really well. Like I said, they've only had two full years of operation there, and they've been very consistent. They've made a ton of money. The grades and the cost there, if we can just replicate that, at least in the near term, that's the priority. Eric said a lot of times, there's an opportunity to run that processing facility at a higher rate than the 1,250 tons per day. But we don't want to get ahead of ourselves there. We want to make sure we've got the underground development there in place to support a potential higher processing rate down the road, and we really want to get aggressive on the exploration.
I think I mentioned that's one of the. I think that's the second largest allocation of exploration investment this year, I think $16 million or so. We really want to get out of year one without seeing the mine life get shorter. We want to at least replace what we've mined there this year. And so other than that, underground mine development, heavy emphasis on in-mine exploration, and continue doing what they were doing for now is the game plan.
Great. And maybe following up on the exploration side, what targets excite you most?
At Las Chispas or any?
Across the portfolio.
It's a cheeky answer, but like Wharf, Wharf, and Wharf because it's just so easy. It's so predictable, and it's the most pronounced return on capital that we have. It's very efficient to be able to invest $3 million-$5 million and add a year of mine life, like I was mentioning. I think off to the east there at Palmarejo, that's probably something that people don't appreciate as much as maybe they should, and maybe for good reason because we've only now started to really emphasize the targets and the opportunities off there to the east. But there's a whole other mine, a whole other life over there to the east at Palmarejo, and we're just getting going down there. I still think Silvertip, even though we don't want to see that become a big cash sink, that is a monster of a system.
We want to invest in there into Silvertip to better delineate that thing, find the edges as the system. We have a tiger by the tail there. I know everybody says that, but we got to figure that out. That's going to be an exciting thing to keep an eye on. We just don't want it to be a source of too much capital to where it's really impacting our free cash flow and our deleveraging priorities here in the near term.
One from the app here, any color you can provide on the recent share price performance and maybe what you see as the outlook for Coeur in this higher gold price environment?
Well, I was asking Kevin that same question before I came up here about the stock. It's gotten hit pretty hard here, it looks like, over the last week or so. We reported earnings last week that weren't, I think it was a $0.01 miss on earnings with the deal closing a week before. Maybe there's some settling out from that. I haven't heard any disappointment about 2025 guidance, but I think it's right in line with what people had been expecting to see and all the pronounced growth and free cash flow. I guess all I can say is it's a buying opportunity. I don't know if you have any other theories.
No, I mean, we talked about this before. I agree with you.
Yeah.
Perfect. I think that runs us through questions, so we'll leave it there. Thanks, Mitch, for joining us.
Thanks, everybody. Appreciate it.